Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

The principal amount of the Company’s outstanding debt totaled approximately $968.9 million at September 30, 2017, of which approximately $865.7 million was fixed-rate debt and approximately $103.2 million was variable rate debt, including

$89.0 million outstanding on the Company's unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.0 billion as of September 30, 2017.

At September 30, 2017, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit. The revolving credit facility matures on June 23, 2018, and may be extended by the Company for one additional year subject to the Company’s satisfaction of certain conditions. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the revolving credit facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2017, based on the value of the Company’s unencumbered properties, approximately $185.8 million was available under the line, $89.0 million was outstanding and approximately $185,000 was committed for letters of credit. The interest rate under the facility is variable and equals the sum of one-month LIBOR and a margin that is based on the Company’s leverage ratio, and which can range from 145 basis points to 200 basis points. As of September 30, 2017, the margin was 145 basis points.

Effective September 1, 2017, the Company's $71.6 million construction-to-permanent loan, which is fully drawn and secured by Park Van Ness, converted to permanent financing. The loan matures in 2032, bears interest at a fixed rate of 4.88%, requires monthly principal and interest payments of $413,460 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity.

On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million at maturity.

On August 14, 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund the Glebe Road development project. The loan matures in 2035, bears interest at a fixed rate of 4.67%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2021, and thereafter, monthly principal and interest payments of $887,900 based on a 25-year amortization schedule will be required.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.2 million outstanding balance at September 30, 2017) and (b) a portion of the Park Van Ness loan (approximately $53.7 million of the $71.6 million outstanding balance at September 30, 2017), which guarantee, subject to the achievement of certain leasing and cash flow levels, may be reduced and eventually eliminated. The fixed-rate notes payable are all non-recourse.

At December 31, 2016, the principal amount of the Company’s outstanding debt totaled approximately $907.8 million, of which $844.3 million was fixed rate debt and $63.5 million was variable rate debt, including $49.0 million outstanding on the Company’s unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled $957.2 million as of December 31, 2016.

At September 30, 2017, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:



(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2017	$	—		$	7,386	$	7,386
2018	130,799		(a)	29,015		159,814
2019	60,793			27,769		88,562
2020	61,163			25,182		86,345
2021	11,012			24,836		35,848
2022	36,502			25,277		61,779
Thereafter	405,693			123,478		529,171
Principal amount	$	705,962		$	262,943	968,905
Unamortized deferred debt costs						6,759
Net						$	962,146

(a) Includes $89.0 million outstanding under the line of credit.

Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2017 and 2016, were as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Interest incurred	$	12,370		$	11,691		$	37,037		$	35,027
Amortization of deferred debt costs	351			339			1,043			1,003
Capitalized interest	(900		)	(506		)	(2,495		)	(1,762		)
	$	11,821		$	11,524		$	35,585		$	34,268